Morris invest - any insights?
Rental Property Investor · Oakland, CA · Member since 2016 · 268 posts · 106 votes
Morris invest - any insights?
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Clayton MobleyPro Member
Birmingham, AL · Member since 2014 · 875 posts · 947 votesAs the CEO of a turnkey outfit in Birmingham and an experienced buy-and-hold investor, I have to agree with basically all of @Jay Hinrichs' points. If a company is selling rehabbed properties for $40k, then they bought them for around 5-10k, meaning these are C class properties at best. More likely you have some seriously distressed D properties in undesirable neighborhoods, because the sale price has to include a profit margin for these guys, the original seller and the rehab crew. So, no matter how nice the properties look now, no one that can afford to live elsewhere will pay to live in those neighborhoods. You could rehab something to look like the White House and never rent it for a decent amount because the amount of crime in the area (not to mention the condition of the surrounding properties) will deter anyone who has the financial ability to be even remotely choosy about where they live.
Which leads us to the issue of equity. I see a lot of people talking here about buying below market to get some built-in equity right off the bat, but equity only truly exists when you sell the property - until then it's just 'expected' value. It doesn't matter how much money has gone into a property if you can't sell it. Put 30, 40, even 50k into a distressed property, it won't matter because no one will pay 40-60k to live in the type of neighborhood where you can buy a 5k property to fix up. If you hold a property for a few decades and the area magically gentrifies into the next hot neighborhood, then great, but that's a miiiiighty big bet to make. Appreciation isn't even guaranteed in A and B class areas, so relying on the possibility of appreciation in lower-tier neighborhoods is very risky.
And regarding the issue of financing, I think that bears a little more scrutiny. Yes, cash is faster and easier, and it does seem that a lot of new investors looking for the next hot deal are keeping this new outfit busy....but when the question 'why do you not work with financing?' receives the answer 'because it's faster and also we don't want to deal with bank red tape like appraisals', I think it's time to dig deeper. Appraisals are important for a number of reason, not least of which because they ensure that the investors knows the value of what they are buying - at least on paper (see my comment above about 'expected' equity on properties with no real resale value). I would hope that this company is encouraging prospective clients to engage the services of a third party appraiser, rather than brushing off the necessity of an appraisal as an unnecessary annoyance.
On the one hand, I'd like to say this is a new outfit that just has more business than they expected. Real estate investing - and turnkey and wholesaling in particular - gets a bad wrap sometimes so we all tend to be a little bit 'on the lookout' for scammers, which is unfortunate. So I'd really like to hope that these guys are as legit as some of the posts here indicate because I like to think that we, as an industry, are learning to separate the wheat from the chaff, leaving only the well-intentioned professionals. Indy can be a great market, and a wholesale-cum-turnkey operation is an inventive model, so I'd like to think these guys are just a little avant-garde. However, I've also seen a lot of posts mentioning how difficult it is to contact them, or to schedule even a simple call in a normal time frame. The fact that the site has little information and that one person wasn't even sure if the guy on the phone was the guy from podcasts gives me pause. A few people have mentioned that it 'seems maybe too good to be true' and, in my experience, that usually means it is. It sounds a little like these guys just want people with cash on hand who will pull the trigger without a lot of questions or checking-in. Whether this is by design or because they are overwhelmed by their own success remains to be seen.
HOWEVER, for those that have spoken to the company and felt that they were on the level, I would say follow your gut but be very sure you take responsibility for doing your own due diligence. Ask them to show you exactly what their ROI numbers are. Ask for a real-world example of their returns on a property similar to the one you are considering. Not with an estimated 40% expense rate, but with the actual expenses incurred for the last year (or however long they've been operating). Don't lump all the costs together, ask for specific expense rates, occupancy, maintenance, move out costs, etc. They should be willing and able to provide these hard figures and they should be happy to walk you through how they add up. Questions from first time investors should never be met with 'tuning out' as one person put it with regard to their mention of financing. Even if they are really busy, an investor with questions, who wants to be educated about their decision, is not an inconvenience and shouldn't be treated as such. If you get the information and the treatment that you deserve and feel confident in the product, then go for it!
Sorry for the ramble ;) Having just read this whole thread, it seemed Jay was a little on his own out there and another experienced perspective might be useful. Take it as you will, and good luck to all in whatever investment niche you choose!
All the best,
Clayton
414 Replies
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes9y
I don't know anything positive or negative about the company. I can say that just like in 2006, 2007 all of these marketing companies are coming out selling goods to investors.
It's a lot worse now because 10 years later technology now is on the phones,videos, face book,everywhere. I must have seen literally ONE HUNDRED different companies selling crap in the last month alone ( invest in houses, flip houses,blah,blah,blah).
People buy into a dream and then reality hits them like a tank.
Anyone buying something fast just because someone else is buying something fast and not completing due diligence isn't investing it is gambling. At least pull crime reports and other statistics for an area.
In a couple years with the next down cycle you will hear of all these investors and also home owners facing foreclosure again just like 2007.
I like higher quality areas because equity growth and stronger rent growth and stability is usually present over long periods of time. Equity growth over time I have seen outpace cash flow for overall return time and time again.
If you are buying this type of property make sure it is something you can stand to lose with the cash if it goes wrong. If you are buying 40k cash and only make 100k a year and have no reserves for much cash left it is a bad idea.
- Property Manager · Northeast Florida · Member since 2015 · 135 posts · 76 votes9y
@Ann Burrows Congrats on getting a deal together. Yes! keep us posted on how it plays out. Hope to catch the update on the forum when you post. I think you are in good hands with Morris Invests. I have heard good things from other "new" turn key investors that have used their services. I think its a great start!
Also, I am in the area so if you ever feel you need a second set of eyes on the ground - don't hesitate to reach out to me! Good Luck!
- Investor · San Jose, CA · Member since 2017 · 343 posts · 102 votes9y
@Joel Owens - Agree with you 200%, I wish these dream merchants would do some research and read carefully the posts from experienced investors. @Jay Hinrichs has been very kind and supportive by sharing his success and failures.
I come across distressed properties on a daily basis in number of cash markets. I bought previously during down turns where the whole street was on sale. I have done my best in this market but time will tell if can ride the next 3 - 5 years. REI has become a zero sum game like stock market where only one person wins.
Thanks
Vivek
I have a call scheduled for tomorrow and will post my feedback afterwards on this thread. I have emailed with Clayton in the past about other issues and he seems to be an honest individual. I do hear his podcasts and particularly like his new one with Robert Kiyosaki. It was informative and entertaining. Kiyosaki has a sense of humor lol.
If anyone has new experiences to share I am sure we would all love to read them
- Stuart, FL · Member since 2016 · 15 posts · 10 votes9y
Not much interaction once a property was purchased. A couple minor things that were quickly handled (landlord stuff. No problem from their end). I get a deposit each month with no headaches.
- Investor · Riverside, CA · Member since 2016 · 4 posts · 4 votes9y
Hi all!
My wife and I recently purchased a property from Morris Invest and are having a tough time with their property management company.
We purchased our home BACK IN MARCH for about $42k and everything seamed to go smoothly at first. We were quoted a 8 - 12 week turn around on the renovations and expected tenant placement.
As of yesterday, 8/8/2017, there is still no tenant and the property management company they use, Ocean Point Property Management, is extremely hard to deal with. It's now been nearly five months from purchase without any renter. Much, much longer than 8 - 12 weeks.
We then contacted another local property management company to drive by and check up on the property. They sent back pictures of furniture, a car parked in the backyard, dog chains, and UNFINISHED renovations. We then contacted Ocean Point again with this info and they finally responded but did not address the pictures with their response. They only reassured us the house was on the market. That was not true.We did a check, the house is NOT listed as available on their website or any other rental listing. Ocean Point Rental Listings (as of 11:20am PDT, 20170809) Nor had they listed it before then as we've kept our eye on the website for a while now.
Good news is, we are now in contact with a great new Property Management CO and learned a valuable lesson for our next deal.
Please be careful when dealing with Morris Invest and their team.
- Investor · Riverside, CA · Member since 2016 · 4 posts · 4 votes9y
UPDATE:
My wife was recently contacted by Clayton and two Ocean Pointe PM reps. They've updated us on the situation and explained the occupied residence was indeed rented but some paperwork fell through the cracks.
Clayton and Ocean Pointe are currently making good on the situation.
CORRECTION: I previously linked to Ocean Point Property Management. This was the wrong PM. It should be referenced as Ocean Pointe (with an e). My apologies to Ocean Point.
Hmmm.....seems like Morris and Ocean Pointe are spending more time monitoring BP posts then responding to their clients !
@Eric Rodriguez Sorry it took a post here to get a response. Stay of top of your investment so nothing else slips through the "cracks" including your $$
I had my phone call today with Morris Invest representative Larry. He was very pleasant and answered all of my questions.
He explained the entire process from beginning to end. We discussed the areas they are acquiring properties in (Jacksonville FL, Indianapolis IN, and Detroit MI). We discussed the closing process, the rehab process and how the property mgmt team vets potential tenants.
I already am receiving emails of homes for sale and will continue to update this thread once I purchase my first investment property from Morris Invest.
- Investor · Redondo Beach, CA · Member since 2017 · 134 posts · 46 votes9y
@Simon Stahl do you mind if I ask how it went with Morris Invest? Did you buy through them and if so, what was your experience like. i'm flying out to meet with their team this coming Monday. Thanks for your time.
- Rental Property Investor · Oakland, CA · Member since 2016 · 268 posts · 106 votes9y
@Vera Herlihy No I never went through with them. They have sent two properties, but when I said no to both of them it felt like they got a bit annoyed at me and they just stopped to send me any more properties.
- Real Estate Consultant · Whitestown, IN · Member since 2014 · 547 posts · 933 votes9y
I am very mixed with what I have seen here in Indianapolis concerning Morris Invest clients. I get 2-3 calls monthly from Morris Invest clients. I have actually become good friends with one of the clients since then. This client has properties through Morris in other markets that are doing very well... I don't think the problem lies with Morris Invest, but with the team in Indianapolis. Indianapolis is a huge investment market and I think the local team that he has here is less experienced and overwhelmed.
Originally posted by @Ross Denman:
I am very mixed with what I have seen here in Indianapolis concerning Morris Invest clients. I get 2-3 calls monthly from Morris Invest clients. I have actually become good friends with one of the clients since then. This client has properties through Morris in other markets that are doing very well... I don't think the problem lies with Morris Invest, but with the team in Indianapolis. Indianapolis is a huge investment market and I think the local team that he has here is less experienced and overwhelmed.
I certainly hope in Jacksonville they are not as overwhelmed. I will look into it a bit further. Ocean Pointe just opened their office in that area so there must be some growing pains
- Orlando, FL · Member since 2017 · 241 posts · 254 votes9y
I have bought multiple properties through Morris Invest and been quite pleased with the results and the entire process. They are busy and, at least when I started with them, there was a minor hiccup or two that was likely due to growing pains. Overall, they have been very attentive and even stepped up to assist when I had a very recent tenant issue (no fault of theirs).
I have no inside knowledge, but can add that in some cases he is moving properties from other turnkey providers but is still involved in the entire process. I would guess (only a guess) that he doesn't hold them all as he would soon run out of money if he did that. If a provider like Morris can make 10-15K on each home (buy-rehab-sell to investor) then for every 4-5 homes they can buy and hold. It makes perfect sense to me.
When you talk with them, as with any turnkey provider, just be clear on what you are interested in; what geographic areas, home prices/values, etc. It is hard for any provider to meet your expectations if you don't adequately share them.
Originally posted by @Jay Hinrichs:
@Chris Clothier well bud you and I are the old dogs... NO WAY NO HOW is this company pushing out 80 turn keys a month in Indy it simply is physically impossible there is not enough man power for one company to do this.. a brisk company in a market is 10 to 15 a month sometimes 20 to 30 in a given market. 80 I am not buying it.. .. I am quite active in Indy and I have funded the top producers in Indy going on 15 years now..
And another team I fund there who has in-house management is also getting Morris fall out.. mainly they won't take them because of location and houses are just plain not up to par. At least that's the reports I get..
As you and other professionals here I mentioned it is hard to believe you get a fully rehabbed C level property for $40k. I am concerned about cash flow long term. Yeah a tenant is placed but what if their operation folds? It seems PMs in the area won't handle those neighborhoods. Also it seems after a rehab the property still doesn't appreciate.
I definitely need to shop around more. I'm not saying No to any turnkey including Morris just yet but I need to contact some other Turn Key providers. Thanks for your valuable insight
- Investor · Redondo Beach, CA · Member since 2017 · 134 posts · 46 votes9y
@Ross Denman thank you, I'm here and will be meeting with them shortly.
- Investor · Redondo Beach, CA · Member since 2017 · 134 posts · 46 votes9y
@Chuck Kramer hi Chuck. Thanks so much for the info. Are you investing with them in Fl or In? So glad to here your investments are going well.
- Orlando, FL · Member since 2017 · 241 posts · 254 votes9y
Current in OH and MI, but considering next purchases in FL maybe.
@Chuck Kramer how long have you been investing with Morris? After reading these posts my only concern is long term. I ask myself will Ocean Pointe be there is 5 years to manage my properties? Will it be in such a bad area that no other property mgmt company will accept my property? After the rehab will my property appreciate so I can reinvest? Will I need to buy a new roof or change all the plumbing for these properties in 2-3 years because they didn't do it initially? (These are just questions I am asking myself)
- Orlando, FL · Member since 2017 · 241 posts · 254 votes9y
@Will Zena All good questions and I don't have all the answers. But, on the topic of appreciation, I don't really factor that in very much. I base my decisions on cash flow and if appreciation occurs, it is just gravy. But I see where you are coming from.
I have had no trouble moving to new property managers but I also have a very very small sample of locations. However, any growing rental market is likely to also have a corresponding growth in property managers.
With any turnkey operation you should be able to get a report from them on the rehab work done so you can at least assess what your likely near-term CapEx expenditures might be and when. With my purchases, they had either a new roof or one with less than 10 yrs on it, new furnaces and hot water heaters; some appliances were replaced; plumbing was updated in all but one. Just protect yourself or enable better decisions by doing your due diligence. A turnkey provider that cannot or will not answer those questions is likely not one you should do business with anyway.
Thanks @Chuck Kramer. Your answers were very helpful. I know you wouldn't have all those answers. I was just typing what runs through my mind. I appreciate you taking the time to reply
- Orlando, FL · Member since 2017 · 241 posts · 254 votes9y
That's what the community is here for and there are many that will help when possible. I wish you good luck and feel free to ask as many questions as you have -- stream-of-consciousness posts are acceptable too.
- Real Estate Agent · Jacksonville, FL · Member since 2015 · 102 posts · 65 votes9yI have followed all the Morris Invest threads as they are expanding in Jacksonville and I'm curious to know what areas of town they are pushing to investors. Can anyone give me some examples of properties they have been marketing here in Jax?
@Chris Carson in my recent phone call I was told Jacksonville, Indianapolis, and Detroit currently. I have seen 2 properties in Jacksonville so far. One was single family for $39k 2bd 1bth and $650 mthly rent.
- Real Estate Agent · Jacksonville, FL · Member since 2015 · 102 posts · 65 votes9y
@Will Zena did they provide zip codes or addresses?
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